Wednesday, September 29, 2010

Tucson's downtown hotel: City Council tosses the hot potato back (Part 4)

The debate about whether or not the City of Tucson should go hundreds of millions of dollars into debt to build a mega-hotel downtown crescendo'd yesterday during a 2-hour Executive Session of the Mayor and Council.

You'll remember that at last week's City Council meeting, Councilman Steve Kozachik couldn't get a second on a motion that began with the question: "What is the City of Tucson’s legal obligation to the design, development and building of the Convention Center Hotel?" and ended with a formal motion that would tell the Rio Nuevo Multipurpose Facilities District Board (RN) that the city would "not backstop or issue any bonds to secure the completion of the Tucson Convention Center Hotel, Parking Garage and Convention Center Expansion" and the city would "not approve any additional expenditures for the Convention Center Projects until RN has negotiated an acceptable GMP [guaranteed maximum price] and funding plan for the project."

Later in the week, the RN Board tossed that hot potato back at the City Council.

At yesterday's City Council meeting, the Council voted 7-0 on the following motion by Kozachik:

I move that we direct staff to proceed as discussed in Executive Session, and to negotiate the following:
a) an agreement with RN for financing the Project that satisfies the direction given by the Legislature.
b) a reduced GMP for the project, as well as reduced developer and design/build fees
c) resolution of issues relating to the use of local subcontractors; and
d) acquiring additional security from the hotel operator

I move that staff not return to Mayor and Council for any further action unless these terms are accomplished.

"Direction given by the Legislature" refers to the RN Board's original charge by the Arizona Legislature to oversee expenditure of RN funds. According to Kozachik, that means that RN cannot "toss it into our lap"... again.

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